Tax Evasion and Lawsuits: Dolce & Gabbana Are Having a Really Bad Summer
They're known for their traffic-stopping dresses and slick black suits, but Italian fashion designers Domenico Dolce and Stefano Gabbana are facing something decidedly unsexy: One year and eight months in prison for tax evasion, and a fine of 500,000 euros.
Italy has been cracking down on companies who use off-shore centers to avoid paying steep Italian taxes (which are about 28 percent for corporations) in an attempt to get back some of the ~160 billion euros they lose every year from tax evasion. The public prosecutor of Dolce & Gabbana's case accused them of performing "sophisticated tax fraud" and wanted to lock them up for two years, but the designers got four months knocked off the sentence.
Then the insults began to fly: Milan's Councillor for Commerce said that Dolce & Gabbana shouldn't be allowed to show their collections in Milan, since "we don't need to be represented by tax evaders." Infuriated, the designers temporarily closed all nine of their stores in Milan and posted a letter in each store window with a headline that read "Closed for Indignation" and this stinging conclusion:
The closing of our shops in Milan is a symbol of our disdain.
And that's not all the haute couture designers are facing this week: Peter Fonda, the star of Easy Rider," is suing the duo for Easy Rider-themed t-shirts that were being sold at Nordstrom. The shirts are emblazoned with various stills from the movie, and Fonda says they never asked for permission to use his face.
Designer drama aside, it's hard to imagine that Dolce & Gabbana will ever step foot inside an Italian jail. It's also hard to imagine that any of this will affect their sales, or even their brands' reputation, in a significant way. The men are undeniable design geniuses, and we are always willing to forgive in the name of art. Artists, like celebrities — and Dolce & Gabbana are certainly both — have a free pass to get away with things. Jail sentences become loosely enforced house arrest. Lawsuits shrink. Controversy increases sales. Fashion bounces back: Kate Moss' career is unscathed by her 2005 cocaine scandal, and even John Galliano (whose anti-Semitic comments got him dropped from Dior in 2011) is designing again.
Dolce & Gabbana are indignant that this drama is interfering with their ability to create; in the Milan letter, they state that they are "tired of being subjected to continuous slander and insults, which are detrimental to the serenity of our work place and distracting us from our work as designers." But thankfully for them, the status and quality of their work as designers is likely what will save them.